Question

If certain conditions are met, the SEC requires companies to disclose information about future events that are reasonably likely to materially affect the firmsâ€™ operations. Many companies are understandably reluctant to disclose such information. After all, positive predictions may not materialize and negative predictions may unduly alarm investors. What ethical considerations should a companyâ€™s managers consider when deciding what prospective information to disclose in the MD&A section of the annual report?